Phil Cannella – Phillip Cannella News: Phil Cannella explains that when we talk about fixed investments, the word “fixed” applies to your principal; you can’t ever lose it. This is very different from fixed income, so it’s imperative that you recognize the distinction. Phil Cannella goes on to say: “Fixed income generally refers to bond instruments, which are securities wherein your income is fixed but your principal remains subject to rising and falling interest rates. As we have seen in the media, interest rates are extremely volatile and have recently declined substantially.”
Phil Cannella, as part of his educational process will tell you that interest bearing accounts operate in much the same way as CDs. Like a bank that issues CDs, the way an insurance company makes its money is by holding the lump sum payment or series of payments that you contribute, then working with the money over a specified timeframe. The insurance company won’t charge a fee to make your account grow – instead they’ll ask you to commit to leaving your money in the account for that timeframe while they put it to work, and to paying a penalty should you take the money back too soon. Typically, the longer the timeframe, the higher the yield. You may choose from any number of periods – one year, three years, 10 years, or more.
For these reasons, Phil Cannella selected interest bearing accounts as a key component of his crash proof retirement system.